Tuesday, 9 February 2016

Why is P2P Lending becoming more popular with investors?

Investors are constantly on the lookout for new investment opportunities which require minimum input and maximum output. A new concept has emerged that adheres to these two criteria: Peer-to-Peer lending (P2P Lending).
P2P Lending has started becoming popular with investors everywhere. With its efficiency and effectiveness, it’s overtaking other financial instruments as a choice for investment. Some reasons for this transition are:
  • Convenience at your fingertips: Peer-to-Peer has taken financial technology to the next level by providing investors an option to invest their money without ever leaving their chair. Through smartphones and laptops, investors can now invest their money into various profiles and track these investments along with their repayments without any requirement to meet any staff member or the borrower himself/herself.
  • Better access to money: Closing procedures of banks and institutional lenders are cumbersome and limiting. There is a lot of paperwork and other underwriter requirements that make it a real hassle. With Peer-to-Peer lending, there is less hassle and fewer limitations. Once you have registered yourself, you can freely invest in whom so ever you like without going through any paperwork every time.
  • Make the most of limited capital: With P2P Lending, there is no defined amount you must invest. You can invest as little as INR 1,000. This opens up a lot of avenues for an investor and you do not have to put all your money in one place. Even when you have limited capital available, you can continue to invest your money and generate income.
  • Spread the risk: With most investment instruments, you end up putting all your eggs in one basket. This increases the risk to an exponential amount. Any default that takes place will sink your investment completely. With Peer-to-Peer lending, you can spread the risk as much as you want by investing in various credit seekers.

Whether you are a small investor just looking at different options or someone who invests a substantial amount of capital regularly, Peer-to-Peer lending is always a very attractive investment option.

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